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Syria's Chemical Weapons; Republicans Offer Fiscal Cliff Proposal

Aired December 3, 2012 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, CNN ANCHOR: It's 10:00 p.m. here on the East Coast.

And we begin with breaking news, new signs tonight the Syrian government could be preparing to do the unthinkable, and unleash chemical weapons on its own people. The United States has new intelligence suggesting Syrian forces now mixing the ingredients used to make deadly sarin gas.

As Syria's civil war has progressed, the Obama administration has repeatedly warned that even just moving chemical weapons would be a red line that could draw a swift response.

Just hours ago, President Obama directly addressed the Assad regime about this latest intelligence.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: today I want to make it absolutely clear to Assad and those under his command, the world is watching. The use of chemical weapons is and would be totally unacceptable. And if you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable.

(END VIDEO CLIP)

KING: The world, of course, has been watching in horror at the atrocities committed by the Syrian government. That's why this fear of chemical weapons is so real tonight.

We want to show you new video posted on YouTube reportedly showing families in Daraa province just after their neighborhood became the target of a regime rocket attack. Like so much video out of Syria, CNN cannot independently confirm its authenticity.

You can see the sheer terror for those families, especially the young children, and it's important to note those were conventional rockets they're running from. Imagine the fear if the regime produces sarin, loads it into artillery shells and fires it into neighborhoods.

The situation there now so dangerous, the United Nations announced today it is immediately pulling all nonessential employees out of Syria.

Arwa Damon, one of the few Western journalists inside Syria right now.

Arwa, you have been to Aleppo, where the Assad regime has a chemical weapons plant. Let's get perspective from the ground and let's start with the regime. What is it saying about this new U.S. intelligence and now new warnings from the United States all the way up to President Obama about a red line on the use of chemical weapons?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, the regime has historically denied that it would use any sort of chemical weapons against its own population, but that is something of an empty promise, at least from the perspective of everyone we have been speaking to about this.

Many of those fighters that we talked on the ground say they do believe the greater the stranglehold they have on regime forces in the city of Aleppo, throughout the entire province, grows, the greater the likelihood is that in a desperate attempt to somehow either regain control or wreak mass havoc on the population, the regime would not hesitate when it comes to employing these types of weapons. And of course, when it does come to chemical warfare, there is very little if anything anyone here can do to protect themselves against that.

KING: Well, that was the follow. Do they have any defenses, are there any defenses and what are they doing to prepare for the prospect if they think that it's real?

DAMON: They have nothing. They have absolutely nothing. The people here have not had anything to begin with to protect themselves from the bullets and the bombs, and most certainly when it comes to chemical warfare, they have no defenses whatsoever, bearing in mind, too, that this is a population that is not just struggling with the violence and the ongoing strikes and artillery raining around them. It is also a population that is barely able to make ends meet.

The prices here have skyrocketed astronomically to the point where something like bread, that was once basically a regular commodity, has become something of a luxury. People are completely and totally helpless already in the face of the regime's airpower and other artillery. They are going to be just as helpless in the face of any sort of chemical warfare if the regime does, in fact, decide to employ that.

KING: Is there any sense among the rebels, the opposition, that perhaps they should be more cautious, take things more slowly, if they fear they could be reaching a potential tipping point that would push Assad to take this desperate step?

DAMON: They realize that this is a fight until the very end and they most certainly are not going to be backing down, because they believe that if Assad would not take this step now, that he would most certainly take it in the future.

One also has to realize just how far this rebel fighting force has come with no international aid or no significant international aid whatsoever. They tell us that they have the majority of military bases in the city of Aleppo and in the entire province entirely under siege at this point.

They have pushed regime forces into around a third of the city pretty much in the southeastern portion of the city, and that is where most of the front lines lie. The military here for the most part is forced to airdrop supplies to its troops that are stuck on these bases. On many occasions because of fire coming from rebel forces, those air drops miss their targets entirely. They are seeing a growing number of defections. They most certainly do feel despite the fact that it is an incredibly dangerous and very intense front line and there are multiple ones, I must say that, but they do feel that right now, they have the upper hand.

And whilst they have the upper hand, they are not going to back down because they quite simply cannot afford to lose any of the significant gains, any portion of this massive amount of territory that they have been able to capture so far.

KING: Arwa Damon inside Syria for us. Arwa, thank you. Stay safe.

DAMON: Thank you.

KING: For more on this, let's bring in CNN national security contributor Fran Townsend. She's also a member of the CIA and Homeland Security external advisory boards. And Bob Baer, a CNN contributor and a former CIA officer.

Fran, let's go first to the president's warning tonight, pretty stern words. They came after Secretary of State Clinton also said the use of chemical weapons by the regime would cross a red line. Is the president drawing that line and is he bringing the United States any closer to military action in doing so?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, John, I think we ought to be clear.

They could have left it today with Secretary Clinton's statement. I think this was a very deliberate point that the president was making. He is fully engaged in this issue. Clearly the president's been briefed, he's talking to his Cabinet. We should assume that the United States military has contingency operations on the table fully prepared ready to go. We have been talking about the four dozen chemical weapon sites inside Syria for months now.

The military has had time to prepare. The administration has been clear, a military option is not where they want to have to go, but I think the president's statement makes the point that they will go there if they have to, and I think that's the right message to send. We cannot permit Syria to think using their chemical weapons and sarin gas stockpiles is an option for them.

KING: You make the important point that when the president gets involved, that's a calculated decision and then every word he says is carefully reviewed. He said he had a message to Assad and those around him. Is that a message about future potential war crimes prosecutions or is it a message trying to encourage those around him to maybe get out of town, defect?

TOWNSEND: Well, I think it is -- it's sort of both to those around him, you know. You can stand with him and run the risk of being prosecuted or killed in a conflict, or you can turn.

But I think it's also a message not simply to the Syrians around Assad. I think it is also a subtler message to the Iranian regime that is clearly continuing to support Assad with weapons and training and advice, so I think it's both to those immediately around him and to Iran.

KING: Bob, given the Iraq history, there could be some skepticism when the U.S. government starts talking about intelligence, weapons of mass destruction, chemical weapons. But there are multiple sources of intelligence in this case.

How serious is this threat, the fact they're actually possibly mixing the chemical agents?

BOB BAER, CNN CONTRIBUTOR: Oh, this is deadly serious.

On Iraq, a lot of it was hypothesis before we went in 2003, as the Bush administration hyped that intelligence, but I guarantee you on Syria, this is very real. This binary chemicals, they have the capability to put them on shells, to drop them by air, extremely dangerous. They are very advanced. And they could do a lot of damage. Secondly, I think what we have to understand is the Alawites, the minority regime there, with its back against the wall will use the weapons.

If it's death or taking care of the opposition, they will use them. There's no doubt in my mind.

KING: You say you have no doubt. But explain why you have no doubt a little bit further. It is as you know a minority regime, the Alawites in this government. Does Assad think he could use these weapons and survive or would it be, if I have to go, I'm taking a lot of people with me?

BAER: It's that. It's the Samson Option.

I have been dealing with the Alawites back from 1980. It's almost -- how many years is that, 30 years now? It's a mentality, a closed mentality, it's almost a cult that runs that country. They think that if they don't hold on to Damascus and the other major cities in Syria, they will be destroyed as a community. They have nowhere to go.

You have to look at it from their perspective. I don't agree with it but this is the way these people think and I have heard it repeated over and over again that they will use any weapons necessary to survive. I was in Hama right after the city was destroyed; 25,000 people at least were killed. They are perfectly capable of carrying out an attack like that right now.

BLITZER: Fran, when you hear such a sober and a seasoned view from Bob Baer, you have been in the Situation Room, you have been in the contingency planning sessions in the White House when situations like this emerge. What kind of planning is taking place now and what does red line mean? Does red line mean if you use those weapons we retaliate or does it mean if we actually see you loading up the artillery shells, if we see you moving them in a way you can use them, then we would strike?

TOWNSEND: You know, your second question, John, we don't know the answer to that. That's obviously a discussion inside the Situation Room of the White House as we speak.

The president is going to have to decide when is it too far to tolerate in terms of the progression to the actual deployment of a chemical weapon. I will tell you, I expect there's a number of things going on behind the scene right now. First and foremost, the secretary of state is no doubt in contact with her counterparts in our allies around the world, trying to foster an understanding of when, whether it be Arab League or NATO or our other allies in Europe, when they would support some type of military intervention, would they be with us and under what circumstances, and for what scope of an operation.

I'm sure, you know, all of the regional allies that are affected, Jordan, Turkey, Israel, all of them must be spoken to and coordinated with as well. So this is a very difficult sort of multilayered chess game both for the secretary of state and the secretary of defense, who must also coordinate and try to build coalitions around this in the midst of this crisis.

We will be sharing intelligence with our allies, and the intelligence agencies will be talking among themselves so they are building a common comprehensive picture of the situation on the ground. So there's a lot of activity that's going on, diplomatically, militarily and in the intelligence circles that we just don't see.

BLITZER: Bob, I almost hate to ask the question, but for somebody who is unfamiliar, if Assad is mixing sarin gas, were he to use sarin gas, what are we talking about?

BAER: We're talking about the kill radius of a small nuclear weapon. Very lethal. It would wipe out a whole neighborhood. There is no antidote the locals have for it. We're talking tens of thousands dying in an attack.

KING: Fran and Bob, sober message tonight. Thank you both.

Let us know what you think. You can follow us on Twitter @AC360.

When we come back here in Washington, time is running out for lawmakers to strike a deal to avoid the fiscal cliff. Negotiations appear to be turning much more into a game of political brinksmanship. Both parties now pointing the finger at the other. We're "Keeping Them Honest" next on 360.

(COMMERCIAL BREAK) KING: As we do here every night, we're "Keeping Them Honest," looking for facts, not offering our opinions or playing favorites. We're not supporting Democrats or Republicans. You can go to other cable channels for that.

Our goal is reporting, finding the truth and calling out hypocrisy. Tonight, the people you elected to go to Washington and get things done can't seem to make any progress at all on the looming fiscal cliff. Instead, what we have is a game of finger-pointing, both Democrats and Republicans, what else, blaming each other for the lack of a deal.

Now, keep in mind time is of the essence here. Automatic tax hikes and spending cuts will go into effect in just four weeks if your members of Congress can't come together and do a deal. On paper, it shouldn't be too hard. It's the job the American people elected them to do and the American people expect results.

They want compromise. In fact, two separate CNN/ORC polls, in those polls, an overwhelming number of people, 72 percent, said both sides should do a better job working together in general. So, the people, that's you, want compromise. Yet this is how the men and women on Capitol Hill, the men and women you elected to work for you, have responded over the last 48 hours.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think we're going over the cliff.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It's unfortunate that the White House has spent three weeks doing basically nothing.

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: What we can't do is sit here trying to figure out what works for them.

BOEHNER: The president's idea of a negotiation is roll over and do what I ask.

GRAHAM: It's pretty clear to me they have made a political calculation.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: If their ideas are different from ours, we can't guess what they are.

TIMOTHY GEITHNER: They should lay it out to us.

CARNEY: We look forward to the time when they are specific.

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: They need to be more specific.

CARNEY: Some specificity from Republicans.

BLUMENTHAL: Some of their specifics.

GEITHNER: That's a decision that lies in the hands of the Republicans.

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: I was disappointed by the president's initial proposal.

BOEHNER: I looked at it and said, you can't be serious.

SEN. BOB CORKER (R), TENNESSEE: Haven't even begun to be serious.

BOEHNER: We need to get serious.

UNIDENTIFIED MALE: I don't think they're serious.

BOEHNER: I would say we're nowhere, period. We're nowhere.

(END VIDEO CLIP)

KING: Hard to disagree with that. We're nowhere, period. Your Congress and the White House at work.

Did I mention a Gallup survey out today found more than half of those surveyed said lawmakers have low or very low ethical standards? According to that Gallup survey, Congress members only slightly more trusted than car salesmen.

When people were asked in our CNN/ORC poll about what they thought Washington officials would behave like in these fiscal cliff discussions, 28 percent said responsible adults, 67 percent said spoiled children. Spoiled children. Low ethical standards.

If ever there was a time for elected officials to step up and prove they don't deserve that reputation, well, it would be now. House Republicans today did offer a counterproposal on the fiscal cliff. Their plan, $2.2 trillion deficit savings over the next decade, but it does not include higher tax rates for the wealthy.

House Speaker John Boehner calls it a credible plan that deserves serious consideration by the White House. Guess what? The White House released a statement tonight saying the plan is nothing new, that it lowers rates for the wealthy and sticks the middle class with the bill.

So to borrow a phrase, we're nowhere, period.

David Walker is president and CEO of Comeback America Initiative. He's made it his mission to promote fiscal responsibility. He joins us now, along with CNN senior political analyst, David Gergen.

David Walker, let me start with you.

The House Republicans put forward their counterproposal. Speaker Boehner says it's credible and the White House should consider it. Is it credible or is it more of what you have called the irresponsible, unethical, immoral behavior of all the politicians here in Washington?

DAVID WALKER, FORMER UNITED STATES COMPTROLLER GENERAL: I think both sides are now putting things on the table, but I think they're confused. What we have to do in the short term is avoid the fiscal cliff. The major decisions with regard to comprehensive tax reform, social insurance programs, et cetera, can't and shouldn't be made until next year, after the American people are engaged and the committees do their work.

KING: David Gergen, how do you get the political solution that opens the door to the policy conversations?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, John, I was encouraged that the Republicans actually came forward with something today. A lot of people thought they would not.

The president, as you know, his team, rejected it late this afternoon, but nonetheless, if people truly want to find a bridge to avoid the fiscal cliff, a way to get to the big issues as David Walker says would have to come next year, I think they're in the makings of it here. Each side will have to compromise some more. Each side will have to eat a little crow, but I think it's imperative that the president take the view that what he's looking for is a win-win. If they take a win-win approach, I think they can get a deal.

(CROSSTALK)

KING: Come in on that point. Two wrongs don't make a right, but do two nonstarters maybe make a starter? How would you help them get there?

WALKER: Look, I think there's a way to bridge this and for both sides to save face. We ought to be trying to get a credible down payment and a one-year extension to get a grand bargain.

For example, you can increase the effective tax rates of the wealthy and the share that they pay without increasing marginal tax rates. Limit the deduction for people above a certain level. Let them be treated just like me. I'm subject to AMT. Let them only get deductions really for charitable contributions and for interest on a mortgage.

You know, on Medicare, start making more means testing for Medicare premiums. Right now, 95 percent of people get a 75 percent subsidy for their premium, irrespective of income and wealth. Start having more means tested premiums for people above a certain level. There's a way to bridge this to a grand bargain. They need to get to work.

KING: David Gergen, David Walker just gave you at least a short term path. But -- but to get that short term path at least in the short term, sounds like the president would have to give up that trophy, the higher rates in the short term. You have advised four presidents, Democrats and Republicans. Do you think this president is ready to do that?

GERGEN: I'm not so sure, John. I have to tell you that over the last two years, I think it was the Republicans who showed an arrogance, a resistance to sort of reasonable compromise, but since this election, there have been -- I think the Democrats are the ones who are really trying to rub it in and almost humiliate the Republicans, and that's not going to get to a bargain.

Again, I think it has to be win-win. David Walker's a magician at this kind of thing. There are creative solutions to this but it does take both parties. We truly wanted an agreement. And there is -- you hear among some Democrats right now -- and it's disturbing -- that maybe we just ought to take it over the cliff. We will score political points against the Republicans, we will force their hands in the new year. That is a very, very dangerous, risky path.

KING: That raises the question, David Walker, do they get it? You say they're confused about the fiscal cliff and the long-term challenge of a grand bargain, but do they get it? Are they stuck in their ideological vault on both sides and they don't see the stakes?

WALKER: I think they're way too involved in partisan politics, not enough listening to the American people. There is only one kind of mandate that occurred in the election in November, because the public returned the Republicans to the House, the Democrats to the Senate, and President Obama to the White House.

They want them to start solving problems. They are absolutely disgusted with this and if they go over this cliff, believe me, there's going to be a price to be paid and nobody's going to be a winner on it.

GERGEN: Yes, but I do want to add, John, I do believe the president did get a partial mandate. At least the voters said the wealthy in this country ought to pay higher taxes.

Now, how you get to the higher tax, whether you raise the rates, whether you reduce their deductions, there are a lot of different ways to get there. The point is, I think everybody now agrees that -- not everybody agrees, but that we need more revenue and that the wealthy ought to be the first ones in line. And that seems to be reasonable, but I think the White House can get too stuck on this whole question of rates as opposed to finding a creative solution that brings in more money.

WALKER: And, David, I agree with you, but you do that through effective tax rates, not through marginal tax rates. That's how you bridge it.

GERGEN: I agree with that.

KING: Two very smart Davids, David Gergen, David Walker, gentlemen, thank you.

(CROSSTALK)

WALKER: Thank you, David.

KING: There is such a fog of partisanship that envelopes this whole debate, it's difficult at times to discern what these proposals would actually mean in the real world. All this week, we will break it down, cut through the spin and find out what impact different parts of the proposals to avert that fiscal cliff will really have. Tonight, we're tackling the much- discussed concept of increasing tax rates for the top 2 percent.

Chief business correspondent Ali Velshi joins me now.

Ali, help us cut through the spin. The partisans all have a different take on this. If you raise taxes on the top 2 percent, what's the impact? What does it look like and how much of an impact would it have on the deficit?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Well, let's look at it in two ways. One is income tax, right? Right now, the highest earners, those households that earn more than a quarter million dollars a year, pay a higher tax rate on the marginal amount, the amount above the $250,000 a year.

So we're talking about taking that rate from 36 percent to 39.6 percent if we even go there. That hasn't even been negotiated yet, but that's 3.6 percent on every dollar you earn above $250,000. There are not a lot of studies that suggest that that would have catastrophic effects on the economy.

The other area that Democrats want to raise taxes are on investment income, things like capital gains, dividend income. Now, those will jump significantly. Here's the thing. Very few of these benefits affect middle class workers. It does affect the higher income earners and the question you have to ask is will it affect their spending patterns, and the thinking amongst Democrats and among many liberal economists is that you don't spend the marginal money that you earn in the same way you spend the core money that you earn, so the impact won't be as big.

It's not to say that there's no impact and it would be better, John, for the economy if we were not raising taxes on anybody and possibly lowering taxes, but there's a doomsday scenario that's been put out there about what would happen if you raise taxes on the top 2 percent. We don't have a lot of studies to back that up.

KING: You say not a lot of studies to back that up because that is the principal Republican argument. They say the recovery is so weak, if you raise taxes on the top 2 percent right now you will hurt the job creators at a time we all know the economy needs jobs. Any validity to that argument? Or is it all spin?

VELSHI: Well, I mean, taxes under Reagan started at a 70 percent marginal rate, went down to 50 percent roughly, in 1986, came down closer to those Clinton era tax rates, 39 percent. We have seen nothing but lower taxes over the last generation.

If we have been enjoying these low taxes, why are those jobs not being created right now? There's not no validity. We have really, really looked into this. You don't generally speaking want to be raising taxes on people if you can avoid it. It costs you competitiveness. But the argument that somehow you're going to see this explosion in economic growth by not increasing those taxes by 3.6 percent doesn't seem to hold water.

We're in a different economy now. There aren't really mathematical formulas you can use to apply to it. It all depends on growth rates and growth rates often depend on confidence in the economy. So there are a few variables here that you can't account for.

KING: Our chief business correspondent, Ali Velshi, thank you.

VELSHI: My pleasure.

BLITZER: Internet security guru John McAfee in hiding, wanted for questioning in Belize in the death of his neighbor. CNN's Martin Savidge got the first on-camera interview with McAfee since he went on the run, an undertaking almost as bizarre as the story itself -- that exclusive interview and what it made so strange next.

(COMMERCIAL BREAK)

KING: The Internet security guru John McAfee is wanted for questioning in Belize in the death of his neighbor. The strange tale began in early November, when McAfee said someone poisoned four of his dogs, dogs whose barking was apparently a source of tension between the two neighbors.

Two days after the dogs were poisoned, McAfee's neighbor was shot in the head. McAfee says he didn't kill him, but that he's afraid for his own life and that authorities in Belize are after him because he refused to pay a bribe to a politician.

CNN's Martin Savidge was the first reporter to find McAfee and interview him on camera since he went on the run and the details surrounding that exclusive interview were almost as bizarre as the case itself. Take a look.

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN CORRESPONDENT: The search to find John McAfee began right here at the airport not long after I landed.

And it began with three simple words: "Sorry I'm late," a prearranged code word to let me know I had met the person who would take me to McAfee.

But it wasn't that easy. What followed was a long drive through winding, twisting streets. And when you thought it was coming to an end, instead, we get into a parking lot, quickly jump out, get into another vehicle, drive off again.

(voice-over): This time with switchbacks, U-turns and back- alleys. It was clearly meant to confuse us, as well as anyone following. And then there we were face to face.

Observation No. 1. With John McAfee there is no such thing as a simple answer.

(on camera) You are John McAfee.

JOHN MCAFEE, MILLIONAIRE IN HIDING: I think so. Yes. I am John McAfee.

SAVIDGE (voice-over): He seemed nervous, anxious, fidgety.

(on camera) Are you afraid?

MCAFEE: Wouldn't you be, sir?

SAVIDGE (voice-over): He used that "sir" thing a lot. His hair is jet black, part of his disguise, he says, and by his own admission, he's vain, asking us to wait for his hair to dry before starting our interview. And that interview ranged from completely convincing, like when I asked him about his neighbor's murder...

(on camera) Did you kill him, George Faull?

MCAFEE: I barely knew the man and why would I kill him? He was a neighbor that lived 200 yards down the beach.

SAVIDGE (voice-over): ... to off the wall.

(on camera) Do you really believe the government is -- this is a vendetta by the government of Belize to take you down and kill you?

MCAFEE: Absolutely, sir.

SAVIDGE (voice-over): He says he's not on drugs, and he hasn't touched alcohol in 30 years. But he has started smoking again, which he puts down to current circumstances.

And he's not alone. Running with his 20-year-old girlfriend and McAfee, who is 67, openly speaks of many more.

MCAFEE: It's absolutely real that I had six -- how many?

UNIDENTIFIED FEMALE: Six.

SAVIDGE: It seemed almost surreal, right down to the coffee I drank with him.

Before we parted, there was one more question I had to ask of the software genius.

(on camera) Are you a smart man? I know you're an intelligent man.

MCAFEE: I don't think so. If I were smart, would I be here? I'm a foolish man. I know that much.

SAVIDGE: And you know what? I believe him.

MCAFEE: You're welcome.

(END VIDEOTAPE) KING: Martin Savidge joins me now live.

Martin, let's start here. How did you originally find John McAfee?

SAVIDGE: You know, John, this was an interview that was weeks in the making, actually, and initially coming down here on the first trip was just to make contact with him.

The physical logistics of it were tough, but it was earning his trust that was even more difficult. The man is extremely paranoid. He says that by his own admission.

So I think what was key was that last Friday, after we had talked many times, the gut feeling of our team was let's go to Belize and when we'd get to Belize, even though nothing had been promised, nothing set up, I called him on the phone and I said, "Look, we're here, we're ready to listen." And that seemed to be what broke the logjam, and he said OK, we're going to get together. And we did. So that's how it came about. It was part gut, and it was intuition and just the network saying, "Let's go."

KING: Smart reporting. Smart reporting. Martin, he's now posted on his blog that he's out of Belize. Anyone know where he is now?

SAVIDGE: No, and you know, I got to say the one thing I've learned about John McAfee is he's an incredible self-promoter. And I'm not saying that, you know, you can't trust what he says. It's just that independently, we have not been able to confirm what he has reported on his blog, that he is out of the country.

The authorities, I've spoken with them, and they say as far, as they know, they still believe he is in the country. But let's face it: Mexico is not very far away to the north, and Guatemala is also right next door, so those are two very likely possibilities.

You know, like everything else with John McAfee, you're simply going to have to wait and see. But I will point out, you know, the most important thing to remember is Greg Faull, the 52-year-old American who was murdered. Somebody killed him. His family grieves, as do his friends here on the island, and it's the justice for him that really needs to be found.

KING: Fascinating reporting. Persistence from our Martin Savidge. Martin, thanks.

Tonight, George Zimmerman's lawyers want to know what took prosecutors so long to turn over this photograph of their bloodied client, taken the night he killed Trayvon Martin. Will this new image help them prove their case that Zimmerman shot the teen in self- defense? That's next.

(COMMERCIAL BREAK)

KING: Britain's royal family is expanding. Prince William and Catherine, the Duchess of Cambridge, big baby announcement coming today as we also learned she's in the hospital. The latest coming up on 360.

(COMMERCIAL BREAK)

KING: In "Crime & Punishment," new questions tonight on the Trayvon Martin case. Take a look at this photograph released today by George Zimmerman's lawyers. It was taken, they say, by a police officer the night their client killed the unarmed teenager. You can see there is blood on Zimmerman's face, and his nose looks swollen. It's the clearest image that surfaced of those injuries described in a police report from that night.

Zimmerman says he killed Martin in self-defense after the teen attacked him, slamming his head against the ground and breaking his nose. Zimmerman's lawyers want to know why prosecutors waited until now, until October, to give them the photograph.

Earlier, the state had turned over a much grainier black and white version of that image. Take a look at them here, side by side. You can see how much clearer the digital version is, but will it help Zimmerman's defense?

In a statement today, a lawyer for the Martin family said, quote, "This isn't a new photograph. This is a color photograph that we've already seen. There would be no interaction between Trayvon Martin and George Zimmerman, had Zimmerman not gotten out of his car. Like the police said, this was ultimately avoidable if George Zimmerman had waited in his car and let the police do their job."

He also said they're still waiting for X-rays documenting Zimmerman's alleged broken nose.

Mark O'Mara, George Zimmerman's attorney, joins me now.

Mark, you've been involved in a number of high profile cases. What do the police say? Why is it from the prosecution side it took you so long to get the high-resolution photo, as opposed to the grainy black and white?

MARK O'MARA, GEORGE ZIMMERMAN'S ATTORNEY: Well, it's just one example of the frustration that we've had in this case getting some discovery.

Again, we got the grainy black and white in the beginning. We then continued to ask for -- we actually got a second one, which was a color copier -- color copy of a picture, and finally last month we finally got the digital photo.

It's just frustrating, because this type of evidence should have come out day one, and quite honestly, I think would have gone a long way to quelling all of the anger against George that was sort of propounded by some of the Trayvon Martin family handlers who just turned this into much more than it ever was in the beginning.

Well, we are where we are now. You heard Mr. Martin's family, Benjamin Crump, his lawyer, saying you've seen the earlier photo. He dismisses it, saying it's not significant, it's just HD, that you've already seen the black-and-white version. How do you think specifically this helps your client?

O'MARA: Well, I think it truly just shows -- I mean, there's blood sort of flooding from his nose a little bit. You can see that. You can really see the nose. It's a much better picture.

So is it devastating? No, but it's just one piece of evidence that shows what George was going through that night and why he reacted the way he did.

Again, as other evidence that we showed concerning who was the one who was screaming for help that night, there was some other evidence that came out. It was referenced in a motion that it was George. And this type of evidence just needs to have come out six, seven months ago.

KING: You filed a motion Friday to get the full audio tape of the interview done by the Martin family with the witness believed to be his girlfriend. How crucial is that? What is it that you're looking for and how crucial is it to your case?

O'MARA: Well, first of all, I think it is the -- the crucial witness of the state's case is the person who was on the phone with Trayvon Martin just before the incident happened. My frustration is that they've had it since March. We have a copy, which first was redacted, of course, and you can tell that it's been edited at least half a dozen to a dozen times.

My frustration is I don't have a copy of the digital format file, and it's absurd that I still don't have it. If it's in Mr. Crump's hands, then he should turn it over to law enforcement. If not, he should be subpoenaed to turn it over. That is crucial evidence. I deserve it, and my client deserves it.

KING: Let me come back one last point about that new HD version of the photo we've seen. Mr. Crump, the Martin family attorney, says he's still waiting for the X-ray of George Zimmerman's nose to determine whether it was actually broken. What can you tell us about that and when will it be ready?

O'MARA: Well, Mr. Crump knows, because he saw the medical records before I did, since they were forwarded to him from the state attorney's office, there are no X-rays because Mr. Zimmerman when he went to the doctor the next day, he really went to be cleared for work. They suggested he get some X-rays, and he didn't do it. Obviously in retrospect, now that this is an issue, I wish we had X- rays.

However, now that we have that picture, I'll let the judge decide in a new hearing. I'll let a jury decide as to whether or not that, in George's mind, was great bodily injury. And of course, we have the hits to the back of the head on cement that also suggests great bodily injury. No x-rays, but I'm quite OK with that.

KING: Mark O'Mara, thanks for your time.

O'MARA: Sure.

KING: Digging deeper, so how big of a deal is this from a prosecutor's perspective? The former Los Angeles deputy district attorney, Marcia Clark, a seasoned prosecutor and author of "Guilt by Degrees," joins me now.

Marcia, you just heard Mr. Zimmerman's attorney, Mr. O'Mara there, saying if that high-resolution photo had been released on day one, at least in the court of public opinion, it would be a very different picture of his client. Do you agree?

MARCIA CLARK, FORMER PROSECUTOR: Not really. I cannot say, John, that I think it's such a big game changer.

We did see the black-and-white photograph. It's not as detailed, of course, as is the one that shows actual color, and the blood, as well. I agree with that.

But we did see photographs, as you've shown, of the back of the head. We saw him with the police in their custody immediately after. We could see the cuts to the back of his head. We could see the blood there. We could see there was some kind of injury to the front of the face. This does certainly corroborate his claim that there was a confrontation between them, that there was a violent struggle.

I don't think even the -- the Trayvon Martin's family attorney would disagree that there was some kind of confrontation between them and a physical altercation.

The bottom line, John, though, is does this photograph, this new one, the digital photograph, mean that we no longer have to listen to what or evaluate the credibility of George Zimmerman's claim that he acted in self-defense when he shot Trayvon Martin? No, it doesn't. It doesn't take away from the fact that we still have to believe George Zimmerman's version of the events in order to acquit him. This photograph does not change that.

KING: And does the complaining, the case from Mr. O'Mara that the prosecution, for whatever reason, is stalling, that they give him first the grainy black-and-white photo, then they give him another photo, then finally the color HD photo, does that have any sway with the jury, as he also shows them the photos and tries to say, "See the blood? This is self-defense"? Does questioning the prosecution's tactics, does that help?

CLARK: Well, certainly, the defense does do that, which is why -- just in general, I have to say, John, you never want to mess around with discovery. It's so important. A defendant has the right to defend himself, has a right under the Constitution to confront and cross-examine witnesses against him, and part of that right means that he gets to see the information and the evidence that's going to be presented so he can prepare his defense.

And I think it's always inadvisable for the prosecution to hold back evidence that they know they have, you know. You've got to hand it over. You've got to give the defense a chance to look at it. It's never going to look good to a jury if the defense can get up and say, "Hey, you know what, you didn't give me this for months and months and months. He had this tape recording, he had this evidence, he had this photograph, and he held onto it and sat on it and didn't turn it over to me until yesterday," for example. That never looks good.

Will it make a difference in terms of the ultimate outcome? I doubt it, because these things are being turned over prior to trial.

Now, if something's being turned over in the midst of trial, literally at the last minute, that can look very bad. That can make a jury turn on the prosecution and say, "Why are you hiding this? Why do you feel you need to hide it? If you have a strong case, why would you do that?"

But that's not what's happening here. They should have -- you know, he's claiming that they delayed in the turning over of the evidence. If that's true, they shouldn't do it. And I think that whatever they do have in their possession now, including the tape recording, should be turned over immediately and let the defense look at it. No reason to hide anything here.

KING: You say you doubt that this particular photo would be particularly persuasive or determinative. You doubt that. But do you think it will be the centerpiece of the defense case in terms of what you've seen in the public domain so far? Is this image, which does show -- you're right about the back of the head, but this also shows significant injuries to the face -- is that the centerpiece of their case, as you see it, from what's available to us publicly?

CLARK: It will be part of the centerpiece for sure, John, because it does show that there's injury to the front of the face. It shows it more graphically than the other ones have. The injuries to the back of the head combined with a bloody nose. He has a bloody nose.

Let me point out, it's not the most devastating bloody nose I've ever seen. And there is some swelling there. Bear in mind that he could have, you know, damaged his nose banging his head on the front of the pavement. I mean, there's a lot of ways where you can -- there's a lot of opportunities and a lot of ways you can hurt your nose without being assaulted or violently attacked by someone.

Like I said, I'm sure they will use this photograph and all of the other photographs that show a bloody situation, a bloody face, a bloody head, but at the end of the day, the jury is going to have to believe what George Zimmerman says about who was the aggressor. That's going to be the bottom line.

KING: Marcia Clark, thank you so much.

A community still coming to grips with the murder-suicide involving NFL linebacker Javon Belcher. Now the family of his girlfriend, who he killed, speaking out. What they're saying about this tragedy next on 360. (COMMERCIAL BREAK)

ISHA SESAY, HLN ANCHOR: I'm "Isha Sesay" with a "360 Bulletin."

The family of Cassandra Perkins, the woman shot and killed by NFL linebacker Javon Belcher, is asking for privacy tonight. They discussed the murder-suicide with our affiliate KCTV, asking the public to keep them and the Belcher family in their hearts.

Two Mexican nationals have been charged in the death of a U.S. Coast Guardsman, and they're being held without bond. Chief Petty Officer Terrell Board III died from a traumatic head injury after an encounter with smuggling suspects off the southern California coast early Sunday morning.

And New York Governor Andrew Cuomo says his state will need billions of dollars in federal assistance to rebuild and repair after Superstorm Sandy. He met today with White House officials and members of Congress -- John.

KING: Isha, thanks.

The first jobs report since the election comes out this week, and analysts predict the lingering effects of Hurricane Sandy could push the numbers in the negative direction.

But far from the East Coast, one Midwestern community has positive thoughts about their community. Largely because of one innovation that is changing their business landscape at an astonishing speed. Tom Foreman has tonight's "Building Up America" report.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: In the bustling heart of Kansas City, the pioneer spirit is burning brightly. Entrepreneurs trading ideas, exploring concepts. And much of it revolves around a handful of houses on a few beaten-up blocks where some small Internet startups are drawing national attention.

MIKE FARMER, CEO LEAP 2: I can go local.

FOREMAN: Mike Farmer is the CEO of Leap 2, a company with a highly advanced mobile search app.

FARMER: People stop by the office every day from either Boston, San Francisco, and Denver. It's just fascinating.

FOREMAN (on camera): That must feel pretty good.

FARMER: Yes, it does.

FOREMAN (voice-over): One big reason these companies are clustering here is that Google chose this neighborhood to launch its much-anticipated super high speed Internet connection. One hundred times faster than most internet links, Google Fiber allows massive video data and graphic files to move with astonishing speed, permitting development of whole new applications.

Under the plan, within the next two years, large sections of Kansas City on both the Kansas and Missouri sides, will be wired.

(on camera) This is exactly what you guys wanted.

CARLOS CASAS, FIELD MANAGER, GOOGLE FIBER: Exactly. That's exactly it. We wanted local entrepreneurs to take advantage of the faster speeds that Google Fiber would bring, and develop. You know, the sky's the limit.

FOREMAN: And how high is that? Even the tech wizards aren't sure.

MATTHEW MARCUS: You know, I've been asked that question a few times, and the truthful answer is, we don't know yet. Now we have a new technology that no one else has in the nation. And it can take our business to a new height that we didn't even dream of.

FOREMAN: The practical effects are easier to predict. Better property values, more reasons for investment, for top talent to come and stay.

(on camera) How much impact can all of this have on your city?

MAYOR JOE REARDON, KANSAS CITY, KANSAS: I think at the end of the day, if you ask any mayor growing that small business, finding an entrepreneur willing to take a risk, and do that in your community, it's going to grow jobs and ultimately grow the economy.

FOREMAN: For now, dreams are growing wild out on the silicon prairie.

Tom Foreman, CNN, Kansas City, Kansas.

(END VIDEOTAPE)

KING: Up next, reaction to the big news across the pond. Prince William and Catherine, the Duchess of Cambridge, are expecting their first child. The announcement comes as Kate is in the hospital with severe morning sickness. We'll have the latest on her condition and what the baby means for Prince Harry next.

(COMMERCIAL BREAK)

KING: Worldwide buzz and it's been trending all day on Twitter. The Duke and Duchess of Cambridge, a.k.a. William and Kate, are expecting their first child. Their baby will be third in line to the throne. The safe bet, the next nine months will be the focus of many, many more tweets.

The news not entirely unexpected. They've been married 19 months, and they've said they want a family. They were forced, though, to break the news earlier than they'd planned. Here's CNN International's Max Foster.

(BEGIN VIDEOTAPE)

MAX FOSTER, CNN INTERNATIONAL (voice-over): The pregnancy rumors started soon after they got married. Not helped by the fact that Princess Diana got pregnant in her first year of her marriage, as did the queen. A year and a half passed, and this was the duchess on Friday, visiting her old school. She was on fine form, even playing hockey in high heels.

We now know she was pregnant. But less than 12 weeks gone. After the visit, Kate went to stay with her parents at their new home in Bucklebury, where she met up with Prince William.

But on Monday she took a turn for the worse. She suffered acute morning sickness, and the couple returned to London for hospital treatment. The duchess will be receiving nutrients, but most importantly, she'll be getting lots of rest. Messages of congratulations have been flooding in.

DAVID CAMERON, BRITISH PRIME MINISTER: It's absolutely wonderful news, and I'm delighted for them. I'm sure they'll make absolutely brilliant parents. And I'm sure everyone around the country will be celebrating with them tonight.

FOSTER: The media have been waiting for this story with baited breath. The palace was forced into an early announcement, because of Kate's hospitalization. But a royal source tells me they're not unduly concerned about her condition at this point.

(END VIDEOTAPE)

KING: Max Foster joins us now, live from London. Max, you say not unduly concerned. Any sense at all of when she'll be released or whether there's any cause for alarm?

FOSTER: Well, she's going to be in for a few days. That's all we know at this point. She's receiving various treatments here. She has to rest. That's the main thing. And if she's not eating properly, she needs to get the nutrients she needs. They're not taking any chances on this. This is one of the best hospitals in the U.K.

I have to say there's been a huge media presence here today. More are coming in all the time from all parts of the world. I can tell you, John, that "The Daily Mail" newspaper, one of the main selling newspapers in this country, is dedicating 14 pages to this in the morning. So they are going very, very big on this, indeed.

KING: And the world. A big story just beginning. Max Foster, thanks.

That does it for this edition of 360. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.